Is Costco Executive Membership Worth it? Is Any? I Run the Numbers.

Mrs. 20SF and I just received our first annual Costco Executive Rewards membership rebate check in the mail a few weeks ago, after upgrading to the $120 Executive membership from the standard $60 “Gold Star” membership, last fall. We had been slowly increasing our annual Costco spend as we have shifted the majority of our grocery spend from other grocers over the years. We decided to give “Executive” a shot when the cashier stated that if we upgraded and don’t come out ahead versus the standard membership, Costco would refund the cost difference between the two membership levels.

Was the Costco membership worth it? I’ll share my results, but you’re not here to see if the cost of standard or executive Costco membership is worth it to me, you’re here to see if it is worth it to you. So I’ll break down the numbers to help you make that calculation.

is Costco membership worth it

Step 1: Understand the Differences Between Costco’s Membership Levels

There are 2 Costco membership levels:

1. Costco Gold Star Membership (the standard membership level):

  • $60 membership fee per year
  • No cash back rewards

2. Costco Executive Membership (the upgraded membership level):

  • $120 membership fee per year
  • 2% cash back rewards, up to $1,000 back per year (note that some items, e.g. alcohol and prescription drugs in some states, purchases of a Costco Shop Card, food court items, Costco gasoline, and optical exams are not eligible for the reward – here’s a full list)
  • “Extra benefits” – includes discounts on insurance, travel deals, etc.

There are also business versions of these two, but they are the same cost and the only difference from the non-business versions above is the ability to add more people to the account.

Step 2: Disregard the Costco Credit Card Rewards

Ignore the cash reward benefits of the Costco Anywhere Visa Card by Citi. The card is the best credit card for Costco purchases and has a number of nice perks to it that make it a keeper, such as 4% cash back on gas, 3% on restaurants and travel, 2% back on all purchases at Costco and, and 1% back on all other purchases. But, those rewards are untied and irrelevant to the Executive versus Gold Star calculation. Every Costco member gets the same cash back rewards if they have the Costco Visa – at Costco and elsewhere – regardless of their membership status.

You’ll get a separate annual rebate check for your Costco Anywhere Visa, but don’t confuse the two. Just ignore it in calculating the worth of Costco Executive membership. The 2 rebate checks are completely separate and unrelated.

Step 3: To Determine if Executive Membership is Worth the Cost, Compare the Upgrade Cost to the Cash Back Benefit

Here is how the math calculations work out when comparing the Executive membership ($120 fee) to standard Gold Star membership ($60 fee) levels:

Monthly Purchases:Annual Purchases:"Gold Star" Annual Reward:"Executive" Annual RewardExecutive "Benefit" (Reward - Cost):
$250$3,000$0$60$0 (break even)
$4,167$50,000$0$1,000 (max)$940

You can see that the current break-even is at $3,000 in spend over your membership year with the 2% cash back.

  • Any spend below that amount, and your Executive membership upgrade fee was not worth the cost (and you should ask for a refund or downgrade if you think there is no way to surpass it in the future).
  • Any spend above that, and you came out ahead versus your Executive membership upgrade fee, making the added $60 expense worth it.

In my first year, I received a check for $60.58 – so I came out a mere $0.58 ahead with the upgrade. I also did not use any of the “extra” benefits, so I personally do not place a value on those (your mileage may vary there).

Update: In my 2nd full year of membership, I ran the numbers again, post annual rebate. This time, I came up short of the $60 Executive up-charge, so I asked Costco for a membership fee refund for the difference, and I got it.

Is Costco Membership Worth it?

Putting membership levels aside, it’s worth asking the question: “Is Costco membership worth the cost?”.

And I’m not talking about the Executive membership here – I’m talking about ANY Costco membership.

This is one of those questions where the answer is going to be dependent on the purchasing habits of each individual consumer. I can tell you from my personal experience, that the savings in Costco gasoline, dog and cat food (check out my Costco Kirkland dog food & cat food review), toilet paper, frozen and canned foods, and Costco’s Kirkland alcohol offerings are easily in the hundreds of dollars per year versus other retailers. Any value on top of those purchases is gravy.

There are some other nice benefits to Costco membership as well. The Costco appliance warranty (1 extra year to manufacturer’s warranty), as well as extended warranties on electronics and other goods, is as good as any retailer out there. And I’ve never had a challenge returning an item that I was not happy with.

If you’re not familiar with Costco’s offerings and item pricing, or even if you are, here are the steps I would recommend, to help you determine if a Costco membership is worth the cost for you:

  1. Research the cost on staple items you regularly purchase, on a per volume (not per unit) basis, versus comparable items at alternative stores (Costco often has larger volume units, so per unit is a necessity).
  2. Using a grocery cost spreadsheet and knowledge of your usage habits, calculate the potential savings per year.
  3. If savings are greater than the standard membership fee (currently $60), then the membership fee is worth it.

You can use a similar strategy to, for example, do a Costco versus Sam’s Club comparison. If you’re not sure what Costco has to offer, there are many ways to shop at Costco without a membership, in order to aid your research.

And if all else fails, you can purchase a membership and give it a shot. There is no risk of loss, as the Costco membership refund policy states:

Risk-Free 100% Satisfaction Guarantee

On Membership: We will cancel and refund your membership fee at any time if you are dissatisfied.

Costco Membership Cost & Value Discussion:

  • Is the standard Costco membership worth the cost to you? Why or why not?
  • Is the Costco Executive membership upgrade worth the cost to you? Why or why not?

Related Posts:


  1. Deke
      • Deke
        • Ed Arnesto W
  2. michael
  3. Bill Voshell
  4. Ed Arnesto W
  5. Holly
  6. Jerry Lee
  7. Steve
  8. Alicia
  9. S Dolby
  10. Kevin
  11. Lanh vo
  12. MamaD
  13. Kathryn
  14. Sandra
  15. Elenita Lesperance
  16. Margaret
  17. Margaret
  18. Michelle Rosenfeld
  19. Erat Joseph
  20. Ottomatic
  21. Tordon
  22. G E
  23. GT
  24. Pat Luftman
  25. Sybil
  26. Steve

Leave a Reply